If I have a contribution margin of 40%, then every additional dollar of sales adds 40 cents to my net income.

Suppose I find a strategy which will add 10,000 of additional sales. This will in turn add 4,000 to my net income, before considering any cost of the strategy. Now suppose this strategy will cost me 4,200 per year.

When you consider an extra 4,000 in profit from the sales increase, but an extra 4,200 in costs to implement the strategy, am I coming out ahead or not... and by how much?

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